Weekly Feed Market Commentary

Published 17 September 14


UK feed wheat futures (Nov-14) closed at £112.60/t on Tuesday (17 September), down £5.45/t from a week earlier, but slightly higher than Monday’s settlement price of £112.0/t. Chicago wheat (Dec-14) futures closed at $182.32/t (down $11.48/t on the week) as at Tuesday’s close. For Chicago maize (Dec-14) futures, the price decline was much less pronounced with prices closing at $135.33/t, down $0.2/t compared with a week earlier.

The price collapse seen over the past week was largely due to the strong bearish message provided by the latest USDA supply and demand estimates released last Thursday. Global wheat production was raised by 3.9Mt from the previous month’s forecast to a record 720Mt, due to upward revisions for the EU and Ukraine. World maize production was increased by 2.1Mt to a record 987.5Mt. Higher estimated yields for the US maize crop led to a 2.6% increase in projected output, compared with last month’s forecast, to 365.7Mt. However, gains for the US were largely offset by a 5Mt reduction in the Chinese maize production number, thanks to the recent drought in the country. Although global demand estimates were also increased for wheat and maize, these were insufficient to offset the rise in production levels, indicating a higher carryover of stocks into 2015/16.

Provisional results for French wheat quality, published last week by France AgriMer, confirmed that the proportion of the French wheat crop meeting milling wheat specification has deteriorated considerably compared with last year. This means that more of the crop is feed wheat and therefore adds to the large supply of feed grains that are expected this season.

Early frosts in the US Northern Plains and the Midwest over the weekend are reported to have inflicted little damage to the maturing maize crop. As at 14 September, 74% of the US maize crop was in good/excellent condition, unchanged from the previous week. 


Chicago soyabean futures (Nov-14) closed at $360.33/t on Tuesday (17 September), down $4.41/t from a week earlier.  As at Friday (12 September), Hi-Pro soyameal prices (ex-store East Coast, September delivery,) were £329/t, £6/t lower on the week. Rapemeal prices (ex-mill Erith, September delivery were £167/t, £4/t lower compared with a week earlier.

The upward revision of global soyabean production by the USDA last week was more dramatic than the changes made to cereal production forecasts. A further 6.4Mt was added to last month’s estimate, bringing global soyabean output to a record 311.1Mt. Higher projected yields in the US and a larger anticipated planted area in Brazil were the main drivers behind the increase.

Following a drop in price after the release of the latest USDA estimates, soyabean prices received some support due to concerns over frost damage in parts of the US over the weekend, but these have since subsided as little impact was seen.

Although new season sales of US soyabeans have remained strong, reaching 23.93Mt as at 4 September (compared with 21.9Mt by the same point in time last year), there are concerns that there could be a slump in Chinese demand. Crush margins for soyabeans in China fell to a two-year low in September and there are reports that the prospects of a recovery in the coming months are slim. Strong demand from China for US soyabeans in 2013/14 provided an appreciable level of support to prices. A fall in US exports to China could amplify the downward pressure on prices.

However, it was reported on Tuesday that China signed an agreement to buy 4.8Mt of US soyabeans on Monday (16 September) following a trade visit from the US Soyabean Export Council. According to Reuters, China is expected to import 30Mt of US soyabeans in 2014/15, 2Mt higher than the previous season.  

Figures and commentary provided in association with HGCA and BPEX.

For further information on the cereals market click here to link through to HGCA website.